Business Studies is a broad subject which covers all the essential aspects of management, accountancy, finance, marketing and organisation. It helps develop entrepreneurial, problem-solving and interpersonal skills. The subject was introduced at the senior secondary level to provide students with a fair idea of how the business world functions. In this blog, we will provide all the important points for revising the most important chapter in class 12th Business Studies: Nature and Significance of Management class 12 notes and help you prepare for your upcoming 12th boards!
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Must Read: Business Studies Class 12 Project
Management: Concept, Objectives and Importance
According to the nature and significance of management class 12 notes, management is an important crux of every organisation; it is an important activity to manage different people performing different tasks in a setting to achieve a common goal. Management is defined as a process of getting things done to achieve goals effectively and efficiently. Management aims to get things done and ensure that they are effectively and efficiently performed with minimum cost and maximum benefits.
Effectiveness vs Efficiency
Next in nature and significance of management class 12 notes, we compare effectiveness and efficiency. Effectiveness and Efficiency are two integral aspects of management. Any management aims to strike the right balance between the two concepts for maximum benefits.
Effectiveness is defined as completing a given task in the right manner and on time. For instance, A company’s target production is 5000 units for a given year. To meet the target the manager utilises more resources and thus, reaches the target but at a higher cost. Thus, the manager was effective but not efficient.
Efficiency is defined as completing the given task with minimum use of resources and with little cost. For instance, If a business decides to produce goods with fewer resources, it is called efficiency but it might not be effective because there is a possibility that the set target will not be achieved on time and the company might end up making a loss in the long run.
Thus, good management is the one that strives for the right balance between effectiveness and efficiency by not compromising on quality but ensuring minimum use of resources.
Characteristics of Management
Next in nature and significance of management class 12 notes, we look at the various characteristics of management. They are mentioned below:
- Goal-Oriented Process: Every organisation has a set of goals that they are constantly working towards. For instance, a retail store’s goal is to increase sales.
- All-Pervasive: This implies that all activities involved in managing an organisation are common everywhere. Every organisation whether it is a school or a store needs management. Managers exist in all enterprises and in all countries.
- Multidimensional: Management has three main dimensions. For example, management of work, management of people and management of organisations.
- Continuous Process: Management entails a series of continuous yet separate functions like planning, organising, directing, staffing and controlling. All managers perform a series of functions in order to ensure the smooth functioning of an organisation.
- Group Activity: Every organisation has a diverse group of individuals working in it. Every person has a different purpose but they all work towards the same goal. Thus, an important aspect of management is to work on teamwork and coordination of individual effort to achieve common goals.
- Dynamic Function: It is dynamic in nature because It is constantly changing and adapting according to the needs of the environment.
- Intangible force: Good management is discernable and an intangible force. It can be observed when there is order, targets are fulfilled, employees and clients are happy.
Objectives of Management
According to the nature and significance of management class 12 notes, there are several objectives of management. The objectives can be classified as organisational, social and personal:
- Organisational Objective: The main objective of every management is to fulfil the economic objectives of a business. These objectives are Survival: The basic aim is to survive and cover all the operational costs, Profit: Survival is not sufficient for the success of any organisation, every organisation must be geared towards making profits. Growth: Businesses need to grow to remain in the competition and achieve their full potential.
- Social Objective: Every organisation has a social obligation towards society. It can mean generating employment opportunities for disadvantaged groups or using environment-friendly methods for production.
- Personal Objective: In any given organisation, some people have personal needs that need to be fulfilled and managed. The needs can be financial, social or related to personal growth and development.
Importance of Management
Management is an integral part of every organisation and helps in many activities, as per the nature and significance of management class 12 notes. They are mentioned below:
- Achieves Group Goals: The management guides all the individuals towards the set common goals and objectives of an organisation.
- Increases Efficiency: Efficiency means using minimum resources and achieving high productivity.
- Creates a dynamic organisation: Management strives to change and adapt to maintain competitiveness and remain relevant.
- Achieving personal objectives: Management must motivate and guide individuals to work towards personal development and ensure group success.
- Helps in society’s development: It helps society by providing high-quality products and services or employment or using green technology.
Management as Art, Science and Profession
Moving on in nature and significance of management class 12 notes, there are certain features of management as art, science and profession.
Management as Art has certain basic features:
- It presupposes the existence of theoretical knowledge on any given subject. This means that there is literature, theory and principles developed over the years.
- Personalised Application: This means that theoretical knowledge is used differently by each individual.
- Practice and Creativity: The acquired theoretical knowledge is subject to individual creativity and potential.
Management as Science has certain basic features:
- Systematised body of knowledge: This means that management is a science because it has certain principles based on a cause and effect relationship.
- Principles-based on experimentation: Scientific principles are developed through a rigorous process of observation, testing and experimentation.
- Universal Validity: Principles are scientific in nature if they are universally accepted and applied.
Management as a Profession has certain basic features:
- Body of Knowledge: All professions are based on some knowledge system.
- Restricted Entry: This applies that only those candidates who have the relevant knowledge and educational background are allowed to enter the profession.
- Professional Association: All professionals are aligned with some professional association which sets the guidelines for that specific profession.
- Ethical Code of Conduct: All professions are bound by ethics in terms of practice.
- Service Motive: All professions aim is good service and client satisfaction.
Levels of Management
According to the nature and significance of management class 12 notes, there are many levels of management. Let us look at the three main levels in the management hierarchy:
- Top Management: It is the highest position in an organisation with complex duties and responsibilities. There are various names for top management positions like chairman, chief financial officer, chief operating officer, vice president or president. Top management consists of different functional heads and is responsible for coordinating activities, setting common objectives and goals of the organisation and for ensuring the general welfare of the enterprise.
- Middle Management: Middle management consists of individuals who are division heads; they are answerable to the top management and in charge of operational managers. While middles managers perform a set of complex tasks, the main task of middle management is to carry out the plans and policies laid down by the top management.
- Supervisory/Operational Management: The lowest level of management yet one of the most essential ones because they are directly responsible for overseeing the workforce. They are directly responsible for the efficient use of resources, maintaining quality and safety.
Functions of Management
Management is a continuous process which involves performing several functions according to the nature and significance of management class 12 notes. Let us look at some of the most important functions managers perform on a daily basis:
- Planning: Planning is pertinent because it entails deciding what is to be done and who will do it.
- Organising: Organising refers to following the set plan by assigning grouping tasks and duties to individuals, allocating resources and establishing authority.
- Staffing: It is an essential function of any manager because it means finding the right person with the best qualities and academic requirements.
- Directing: Direction has two components: Motivation and Leadership. A good manager ensures that the employees are well motivated and influences them to perform effectively and efficiently.
- Controlling: This means supervising organisational activities and performance to achieve organisational goals.
The process by which a manager synchronises the activities of different departments is known as coordination. Coordination is the most important aspect of management and aimed at achieving the common goal through individual efforts according to the nature and significance of management class 12 notes. It is an integral aspect of every function performed by the manager, from planning to controlling.
Coordination is important because it helps combine individual efforts and different department activities to achieve group goals. In any organisation, coordination is important because departments are interdependent and must work together to achieve their daily goals. The need for coordination is absolutely essential when:
- Companies grow in size and employ numerous employees to perform tasks. A manager has to coordinate all individual efforts towards the common goal.
- Companies have functional differentiation. It is when functions are divided into departments and divisions. Each department has its own specific goals which may or not align with other departments. Thus, the manager must coordinate the activities of all the departments in order to avoid conflict, overlap or miscommunication.
- Companies have specialisations for which they hire specialists. These specialists are experts in their fields, they require supervision and coordination.
We end our notes for the topic: Nature and Significance of Management class 12 notes. The field of management is vast, with various MBA specialisations in it! If you wish to pursue business administration after your 12th boards, you should seek professional advice from our experts at Leverage Edu and choose the right college for yourself!